Study: Nonprofits’ Lack Of Culture Hinders Income Growth

Fewer than half (48 percent) of fundraisers believe philanthropy is embedded at the core of their nonprofit. And while 95 percent of fundraisers believe fundraising planning is immensely valuable, there are no formal planning documents in place at slightly more than one in four organizations (28 percent).

Those are some of the findings from The Institute for Sustainable Philanthropy, a global research and professional training organization in Plymouth, Devon, United Kingdom, in its study Development Plans and Fundraising Performance, a study to examine how planning is undertaken in the fundraising sector and its impact on income. The report presents data from a study of 325 fundraisers globally, demonstrating the importance of fundraising planning and providing statistical evidence to show that strategic planning drives higher income growth, donor retention and fundraiser confidence. 

While the large majority of organizations do have fundraising plans in place and recognize the need for strategic planning, the report identifies that many lack philanthropic culture and engagement from the board. Some 84 percent of fundraisers believe that their nonprofit is donor-centric, in that it is organized around donor need. But, fewer than half (48 percent) say that philanthropy is embedded at the core of their organization. Only two in five respondents (40 percent) believe that colleagues outside of the fundraising team could clearly articulate the case for support. 

Adrian Sargeant, Ph.D., co-director of the Institute for Sustainable Philanthropy and report author wrote: “Failure to plan is effectively planning to fail. It’s crucial that charities of all sizes engage in rigorous planning with the involvement of fundraisers, senior management and the board.”

According to Sargeant, the research shows a clear link between philanthropic culture and fundraising success. Nonprofits where board members value and respect the work of fundraising teams and support them and their planning process have better fundraising performance. 

The report data shows the vast majority (95 percent) of fundraisers believe planning to be an immensely valuable process, however one in four fundraisers (28 percent) say their organization lacks a formal planning document. Larger organizations are more likely (78 percent) to have a written plan than smaller nonprofits (63 percent).

Fundraising plans have greater levels of success in terms of revenue growth, donor retention and fundraiser confidence when the board is involved in their design, according to Sargeant. In most cases (75 percent), the senior management team is involved in fundraising planning, but fewer than half of respondents (45 percent) report involvement at the board level.

The data shows that the board has a crucial role in the development of philanthropic culture, an area which correlates positively with fundraising performance. And yet, only 57 percent of fundraisers think that their board is supportive of them. Crucially, one-fifth of fundraisers (20 percent) do not believe their organization views them as professionals. However, professional recognition of fundraisers is higher in those organizations that formalize fundraising planning.

The full report can be accessed at https://bit.ly/3cxeHW9